Private equity turned vulnerable elderly people into human ATMs
19 hours ago
- #corporate-ethics
- #elder-care
- #private-equity
- Robert Kilgour purchased an old hotel in 1987 with plans for apartments, but after a grant cancellation, he converted it into a care home, founding Four Seasons Health Care in 1989.
- Government shifts in social care funding to local councils created opportunities, leading Kilgour to expand Four Seasons into a chain of 43 homes by 1999 with partner Hamilton Anstead.
- The company was sold to private equity firm Alchemy Partners in 1999, marking the start of its troubled journey through multiple owners, leveraging debt, and eventual financial struggles.
- Private equity's leveraged buyouts and 'sale and leaseback' strategies in care homes prioritized profits, often leading to debt burdens and cost-cutting that compromised care quality.
- Guy Hands' Terra Firma bought Four Seasons in 2012 with plans to improve care but faced challenges due to government funding cuts, high debt, and complex corporate structures.
- Whistleblowers like Eileen Chubb exposed poor care standards, with understaffing and neglect prevalent in many homes, including those owned by private equity.
- Studies, including one from 2021, linked private equity ownership in care homes to increased resident deaths and worse outcomes, such as higher use of antipsychotic drugs.
- During the COVID-19 pandemic, highly leveraged care homes had higher death rates, highlighting the risks of debt-driven models, while government responses included temporary funding boosts.
- Kilgour later started a new care business focusing on quality, refusing private equity partnerships, but his high-cost model limits accessibility to wealthy individuals.
- The article critiques private equity's role in elder care, arguing that profit motives clash with the need for humane, well-funded services, leading to systemic failures and ethical concerns.